Which of the following would increase the speed of equity growth for a homebuyer?
A)making a down payment of 10 percent instead of 20 percent
B)obtaining a mortgage interest rate of 9 percent instead of 8 percent
C)obtaining a 15-year mortgage instead of a 30-year mortgage
D)making larger deposits to the escrow account
E)obtaining an interest-only mortgage

Question

Quizplus · Accepted Answer

Choosing a 15-year mortgage instead of a 30-year mortgage would increase the speed of equity growth as it results in higher monthly payments and a faster repayment of the loan. This would reduce the amount of interest paid over the life of the loan and increase the equity built up in the home. The other options either result in higher costs (option B, D, E) or a lower down payment (option A) which would slow down the equity growth.

Which of the Following Would Increase the Speed of Equity